Commissioner of Customs vs. Navarro

The Collector of Customs has exclusive jurisdiction over imported goods from the moment they are in the Bureau of Customs' possession or control for enforcement of customs laws, and a Court of First Instance lacks competence to enjoin a pending seizure and forfeiture proceeding; the sale of perishable goods at public auction under Section 2607 upon reasonable notice does not deny due process.

Juanito S. Flores, doing business as J.S.F. Enterprises, and Asiatic Incorporated were importers of fresh fruits. The Commissioner of Customs and the Collector of Customs are the petitioners in this case. The Tariff and Customs Code, Republic Act No. 1937, governs seizure and forfeiture of imported goods and permits the sale at public auction of perishable goods during such proceedings. Central Bank Circulars Nos. 289, 294, and 295 classified non-essential consumer commodities as prohibited importation or importation contrary to law.

Juanito S. Flores, doing business under the name and style of J.S.F. Enterprises, and Asiatic Incorporated, represented by Eugenio Villanueva, imported 1,350 cartons of fresh fruits. The shipment was classified as non-essential consumer commodities and was banned by Central Bank Circulars Nos. 289, 294, and 295 as prohibited importation or importation contrary to law. Under the Tariff and Customs Code, such importation was subject to forfeiture proceedings by the Collector of Customs. Because the goods were perishable, the Collector proceeded to advertise and sell them at public auction under Section 2607 of the Tariff and Customs Code.

On January 4, 1971, respondent Judge Pedro C. Navarro of the Court of First Instance of Rizal, Branch II (Pasig, Rizal), issued an order granting a writ of preliminary injunction as prayed for by private respondents. The writ restrained the Commissioner of Customs and the Collector of Customs from proceeding with the auction sale of the fresh fruits. The importers had filed Civil Case No. 14178 in that court against the customs officials.

On February 11, 1971, the Commissioner of Customs and the Collector of Customs filed a petition for certiorari in the Supreme Court seeking to nullify and set aside the January 4, 1971 order. On February 15, 1971, the Supreme Court issued a resolution requiring respondents to file an answer and issued a writ of preliminary injunction as prayed for by petitioners to prevent the challenged order from being implemented. Instead of filing an answer, private respondents submitted a manifestation on February 27, 1971, stating that after an intensive and serious study they had decided to abandon their interest in the case, citing the desire to avoid additional expenses because the shipments, being perishable, had already deteriorated, and expressing their intention not to file an answer and to submit the case on the basis of the pleadings made before the lower court.

The Supreme Court observed that it was difficult to avoid the suspicion that the real reason for abandonment was that the points of law raised by petitioners could not be refuted. The importation in question was clearly violative of Central Bank Circulars Nos. 289, 294, and 295, and the Collector of Customs was, in accordance with law, definitely opposed to the release of the importation.

• Jurisdiction: Petitioners stressed the jurisdictional issue and sought to nullify the January 4, 1971 order issuing a writ of preliminary injunction; they argued that seizure and forfeiture is a matter falling within the exclusive competence of the customs authorities, with the administrative authorities and then the Commissioner of Customs acting in the first instance, appeal to the Court of Tax Appeals, and further judicial review only by the Supreme Court through certiorari.
• Due Process: Petitioners pointed out that in ordering the public auction of the perishable fruits, they acted in accordance with Section 2607 of the Tariff and Customs Code; proper advertisement was made, and there was no denial of due process.
• Alikpala Misplaced: Petitioners argued that respondent Judge's reliance on Commissioner of Customs vs. Alikpala was misplaced because that case was distinguishable and had not been followed; later cases such as Seneres vs. Frias and Pacis vs. Geronimo annulled similar injunctions for lack of jurisdiction.

• Jurisdiction over Seizure and Forfeiture: Whether the Court of First Instance had jurisdiction to issue a writ of preliminary injunction restraining the Collector of Customs from proceeding with the auction sale of perishable goods during a pending seizure and forfeiture proceeding.
• Due Process: Whether the public auction sale of perishable goods under Section 2607 of the Tariff and Customs Code, upon notice deemed reasonable by the Collector, violated due process.
• Applicability of Alikpala: Whether Commissioner of Customs vs. Alikpala controlled and justified the Court of First Instance's injunction against the customs auction.

• Jurisdiction over Seizure and Forfeiture: No. The Collector of Customs has exclusive jurisdiction over seizure and forfeiture proceedings, and a Court of First Instance is devoid of competence to act on or enjoin such a matter; certiorari lies.
• Due Process: No violation. Section 2607 authorizes the Collector to sell perishable goods at public auction upon notice as he deems reasonable, and the procedure followed was not arbitrary or unfair.
• Applicability of Alikpala: No. Commissioner of Customs vs. Alikpala is distinguishable and has not been followed; the importation here was clearly violative of the applicable Central Bank circulars, and the Collector opposed its release.

• Jurisdiction over Seizure and Forfeiture: The question of seizure and forfeiture is for the administrative authorities in the first instance and then the Commissioner of Customs; the doctrine of primary jurisdiction controls. Appeal lies to the Court of Tax Appeals, and further judicial review is only by the Supreme Court in the exercise of its certiorari jurisdiction. A Court of First Instance is thus devoid of competence to act on the matter. The Court relied on Pascual vs. Commissioner of Customs, which affirmed that the Commissioner could seize goods lacking Central Bank release certificates and order their forfeiture under the appropriate provisions of the Revised Administrative Code, and on a line of cases reiterating that doctrine. Pacis vs. Averia held that the Court of First Instance's original jurisdiction in an action for recovery of personal property subject to a forfeiture proceeding tends to encroach upon and render futile the Collector's jurisdiction; the court should yield. Auyong Hian vs. Court of Tax Appeals traced the rule to Government vs. Gale, which recognized that a Collector of Customs sitting in forfeiture proceedings constitutes a tribunal upon which the law expressly confers jurisdiction. Ponce Enrile vs. Vinuya reiterated that exclusive jurisdiction in seizure and forfeiture cases vested in the Collector precludes a Court of First Instance from assuming cognizance. Papa vs. Mago held that the Bureau of Customs acquires exclusive jurisdiction over imported goods from the moment they are actually in its possession or control, even if no warrant of seizure or detention had previously been issued. Seneres vs. Frias stated the settled rule that customs authorities acquire exclusive jurisdiction over goods sought to be imported from the moment the goods are actually under their possession and control, even without a prior warrant. Because the Bureau had jurisdiction, the Court of First Instance did not acquire jurisdiction over the goods and had no authority to issue the injunction.
• Due Process: Section 2607 of the Tariff and Customs Code permits the Collector to sell at public auction property that is liable to perish or depreciate greatly by keeping, upon notice as he deems reasonable. The proper advertisement to sell the perishable goods at auction was made, and that was the notice required by the statute. Private respondents, as importers, could not have been unaware that such a step was contemplated. There is nothing arbitrary or unfair, the earmarks of a denial of due process, for the Collector to order the sale at public auction upon reasonable notice of a commodity perishable in nature. This procedure safeguards the rights of both the government and the importer during the pendency of the seizure and forfeiture proceeding; if the illegality of the importation is not shown and forfeiture is not ordered, the proceeds could be turned over to the importer. The importation was banned by the applicable Central Bank circulars, so petitioners had no choice but to proceed under the mandatory provisions of the Tariff and Customs Code.
• Applicability of Alikpala: In Commissioner of Customs vs. Alikpala, the Court did not set aside an injunction stopping the auction of imported fruits. That case is distinguishable: the warrants of seizure there were issued in view of Central Bank Circulars Nos. 294 and 295; the Collector himself evidently saw no legal impediment to release under bond, as he agreed thereto though he changed the requirement from surety to cash; and the importations had been ordered before Circulars Nos. 294 and 295 were promulgated, so there could be no bad faith or intent to violate them. Here, the importation was clearly violative of Circulars Nos. 289, 294, and 295, and the Collector was definitely opposed to release. Alikpala is the only one of its kind and has not since been followed; Seneres vs. Frias set aside a preliminary injunction and chided the lower court for assuming jurisdiction, and Pacis vs. Geronimo annulled a similar injunction for manifest lack of jurisdiction.

• Primary Jurisdiction and Exclusive Customs Jurisdiction in Seizure and Forfeiture — In seizure and forfeiture cases, the doctrine of primary jurisdiction controls: the matter is for the administrative customs authorities in the first instance and then the Commissioner of Customs, with appeal to the Court of Tax Appeals and further judicial review only by the Supreme Court through certiorari. The Bureau of Customs acquires exclusive jurisdiction over imported goods from the moment they are actually in its possession or control, even without a warrant of seizure or detention, to the exclusion of regular courts. A Court of First Instance is devoid of competence to act on or enjoin such proceedings. Applied: the injunction issued by the Court of First Instance was nullified.
• Due Process in the Sale of Perishable Goods — Section 2607 of the Tariff and Customs Code allows the Collector to sell perishable goods at public auction upon notice as he deems reasonable. This procedure is not arbitrary or unfair and does not deny due process; it protects both the government and the importer because the proceeds may be turned over if forfeiture is not ordered. Applied: the auction of the perishable fruits upon proper advertisement did not violate due process.

• "The question of seizure and forfeiture is for the administrative in the first instance and then the Commissioner of Customs. This is a field where the doctrine of primary jurisdiction controls." — This states the ratio decidendi on jurisdiction and identifies primary jurisdiction as the controlling doctrine.
• "It is the settled law and jurisprudence in this jurisdiction that the customs authorities acquire exclusive jurisdiction over goods sought to be imported into the Philippines, for the purpose of enforcement of Philippine customs laws, from the moment the goods are actually under their possession and control, even if no warrant for seizure or detention thereof has previously been issued by the port collector of customs." — This is the Court's canonical formulation of the exclusive jurisdiction rule, quoted from Seneres vs. Frias.
• "There is nothing arbitrary or unfair, the earmarks of a denial of due process, for the Collector to order the sale at public auction upon notice as he shall deem to be reasonable of a commodity in their nature perishable." — This defines why the Section 2607 auction procedure satisfies due process.
• "The prevailing doctrine is that the exclusive jurisdiction in seizure and forfeiture cases vested in the Collector of Customs precludes a court of first instance from assuming cognizance over such a matter." — This states the prevailing doctrine as quoted from Ponce Enrile vs. Vinuya and reinforces the jurisdictional holding.

• Pascual vs. Commissioner of Customs, 105 Phil. 1039 — Foundational precedent affirming that the Commissioner of Customs could seize importations lacking Central Bank release certificates and order their forfeiture under the appropriate provisions of the Revised Administrative Code.
• Pacis vs. Averia, L-22526, November 29, 1966, 18 SCRA 907 — Held that a Court of First Instance's exercise of original jurisdiction over personal property subject to a forfeiture proceeding encroaches upon and renders futile the Collector's jurisdiction; the court should yield.
• Auyong Hian vs. Court of Tax Appeals, L-25181, January 11, 1967, 19 SCRA 10 — Traced the exclusive jurisdiction rule to Government vs. Gale and recognized the Collector of Customs sitting in forfeiture proceedings as a tribunal expressly conferred jurisdiction.
• Government vs. Gale, 24 Phil. 95 — Early decision recognizing that a Collector of Customs in forfeiture proceedings has jurisdiction to hear and determine all questions touching forfeiture and disposition of the subject matter.
• Ponce Enrile vs. Vinuya, L-29043, January 30, 1971, 37 SCRA 381 — Reiterated that exclusive jurisdiction in seizure and forfeiture cases vested in the Collector of Customs precludes a Court of First Instance from assuming cognizance over the matter.
• Papa vs. Mago, L-27360, February 28, 1968, 22 SCRA 857 — Held that the Bureau of Customs acquires exclusive jurisdiction over imported goods from the moment they are actually in its possession or control, even without a prior warrant of seizure or detention.
• Seneres vs. Frias, L-32921-40, June 10, 1971, 39 SCRA 533 — Set aside a preliminary injunction issued by a lower court and stated the settled rule on exclusive customs jurisdiction over imported goods under the Bureau's possession and control.
• Commissioner of Customs vs. Alikpala, L-32542, November 26, 1970, 36 SCRA 208 — Distinguished; its injunction was not followed because the Collector there agreed to release under bond and the importations were ordered before the relevant circulars, unlike the present importation which was clearly violative of the circulars.
• Pacis vs. Geronimo, L-24068, April 23, 1974, 56 SCRA 583 — Annulled a similar preliminary injunction issued in a pending seizure and forfeiture proceeding on the ground of manifest lack of jurisdiction.

• Sections 2301, 2303, and 2530, Republic Act No. 1937 (1957) — Cited as the relevant sections of the Tariff and Customs Code under which the Collector of Customs proceeded against the prohibited importation for forfeiture.
• Section 2607, Republic Act No. 1937 (1957) — Authorizes the Collector to sell at public auction property liable to perish or depreciate greatly by keeping, upon notice as he deems reasonable; applied to justify the auction of the perishable fruits and to reject the due process claim.
• Central Bank Circulars Nos. 289, 294, and 295 — Classified non-essential consumer commodities as prohibited importation or importation contrary to law; served as the basis for the seizure and forfeiture proceedings and for distinguishing Commissioner of Customs vs. Alikpala.

Muñoz-Palma, Aquino, and Martin, JJ., concurred. Barredo, J., filed a separate concurring opinion, stating that because private respondents submitted the case on the basis of the pleadings below, otherwise, since they had lost interest, the Court could have issued a brief resolution. Antonio, J., took no part. Concepcion Jr., J., was on leave.